Microsoft said it would also work with Australia's cyber spy agency.
Microsoft announced Tuesday a Aus$5 billion (US$3.2 billion) investment in Australia focused on cloud computing and artificial intelligence, saying it would boost the country's economy and cyber defences.
Details of the deal were outlined by bosses at the US tech giant and by Australia's prime minister, Anthony Albanese, who is on a four-day official visit to the United States.
It represents Microsoft's largest investment in Australia in its 40-year history in the country, the company said in a statement.
Microsoft will expand its "hyperscale" cloud computing and AI infrastructure in Australia over the next two years, adding nine data centres to the 20 already in Canberra, Sydney and Melbourne, it said.
The tech giant said it would also work with Australia's cyber spy agency, the Australian Signals Directorate, on a "cyber shield" to protect the country from threats.
Albanese welcomed the investment during a news conference at the Australian embassy in Washington.
Microsoft's partnership with the signals directorate would improve Australia's capacity to identify, prevent and respond to cyber threats, he said.
"We know that this is having an impact on all companies. We know as well, that this is about individuals and the protection of who they are," the prime minister told reporters.
"We need to get this right."
There were 76,000 cybercrimes reported to the Australian Cyber Security Centre last year, although experts warn many more go unreported.
Late last year, more than nine million people had personal data stolen during a cyber attack on phone company Optus and up to 9.7 million had their details leaked onto the dark web after health insurer Medibank was targeted.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)